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Confessions of a Point Hoarder

I have a confession to make. I’m a point hoarder. You know, when I earn points, hotel nights, or miles in a loyalty program or my employee engagement program at Maritz, I like to accumulate a lot so I can use them to get something meaningful. For example, when one of my best friends invited me to join her on an incentive trip to Maui earlier this year, I treated us to a fabulous spa at the Fairmont on Wailea Beach. Our massages at the luxury resort were rather pricey, but you know what they cost me? Nothing. I used my points that I earned at work.

I’ve also been saving my points in my Walgreens Balance Rewards program to pay for my photo Christmas cards this year.

I’ve had holiday cards of my dog and I printed there for the past few years. I’ve paid close attention to the balance lately because I’ve been inching closer to the $50 reward level, which should pretty much cover the cost of my cards. Free Christmas cards will be sweet—right?

Well it sounded like a great plan until I visited my neighborhood Walgreens last Saturday morning. As I was checking out, the very friendly clerk asked me if I’d like to apply my $20 reward to my purchase.

Me: “Twenty dollars? What do you mean, I’m almost at the $50 reward level?”
Friendly Clerk: “Our program recently changed and we’ve expired points that haven’t been used within the past year. It says here you have a $20 reward.”

 

She graciously offered to help me look up my point balance on the Balance Rewards app. Sure enough, more than 16,000 points had been wiped from my account the day before. She explained that Walgreens must have sent me emails and clerks had been instructed to alert customers during check out, but somehow the news about expiring points never reached me. And expiring points don’t jive with the strategy of a point hoarder. Despite the positive in-store customer experience I just received from this perky and delightful Walgreen’s associate, I felt the rewards program had failed me and I quickly considered going to CVS the next time I need to purchase cotton balls, sunscreen and vitamins.

Still in the parking lot, I sent a tweet to Walgreens:

In less than an hour I got a response from WAGsocialcare, the customer service team that responds to complaints and praise via social media. They asked that I direct message them:

 

This interaction highlights two points that my colleague Barry Kirk, VP of loyalty solutions, knows very well. When it comes to your experience with a brand—people don’t differentiate their experience at the store with their experience with the loyalty program. In my case this weekend, the customer experience, my satisfaction with the clerk, was worthy of all 10’s. On the other hand, my experience with the loyalty program was a fail.

According to Barry, it typically happens the other way around – the relationship fails at the customer level causing the person to disengage from the loyalty program.

Barry advises, “At Maritz, we have evolved our definition of loyalty beyond just point rewards. We view loyalty as ‘the CX of your best customers.’ Once a customer joins your loyalty program, they will begin to view their entire experience — including their in-store experience — through the lens of loyalty. This is why it’s so key that your loyalty strategy take into account all of the touch points your brand has with that customer, not just the loyalty program itself.”

Barry’s second point has to do with expiring points. “Generally speaking, in the loyalty space it’s a good strategic practice to expire your points, but you need to execute the right way,” according to Barry. His advice: “Typically you want to give the customer a longer time period to adjust to the change. Or start with expiring points of inactive customers. Taking something away is a recipe for activating a customer’s drive to defend.”

Fortunately, my experience has a happy ending—well so far. We’ll know for sure if and when I get free Christmas cards. After looking into my account, as a one-time courtesy, Walgreens is reinstating the points they wiped away. I’m considering redeeming them right now for a $50 gift card to Walgreens before they wipe away more old points next month and I fall below that reward level.

I’m curious to know what you think about companies that expire points or what your thoughts are on the connection between a brand’s loyalty program and customer experience. Please share your thoughts in the comment section below.

The Debate on Customer Loyalty and the Future of Points

The Great Customer Loyalty Points Debate

If you have pondered the future (and potential extinction) of points-based customer loyalty programs, it’s worth taking note of a debate that briefly raged at a Loyalty Academy Conference hosted by The Wise Marketer.

Loyalty Academy, a newer entry to the loyalty space, is an annual confab of loyalty practitioners from 16 countries gathering to share best practices and discuss the future of customer retention and engagement. This year’s event also proved to be the perfect forum for an Oxford-style debate that posed a question on many loyalty marketers’ minds:

Are points-based loyalty programs still necessary to build customer loyalty and foster profitable behavior change?

This is far from an academic question. Many brands today that are considering a new program are not automatically assuming they need a proprietary loyalty currency. And some with legacy programs are evaluating the place points will play in the future. In February Coca Cola put this question in the spotlight when it announced a decision to sunset the point-based aspect of their long-running “My Coke Rewards” program to focus instead on more experience-based offerings.

The Debate Begins

The Loyalty Academy discussion on points pitted Nicole Harris of Maritz (pro) against Phil Rubin of rDialogue (con), each of whom had agreed to represent a particular viewpoint for the purpose of the debate. Rubin opened with the argument that traditional points-based loyalty programs no longer fully meet the needs of the customers they were created to entice. He also noted that their value as the primary tool of loyalty marketers has diminished as the market has shifted focus more toward optimizing emotional connection and customer experience.

Harris came at her pro-points argument from a strong human sciences perspective. She cited how a program currency can enable a brand to leverage both medium maximization theory and goal gradient hypothesis to engage customers. She went on to note that points programs also allow you to engage the social brain, as consumers will often publicly discuss how many points or miles they have earned in your program, even though they’d never discuss how much money they have in the bank.

From the perspective of the Multi-Loyalty Framework, Rubin essentially argued that Mercenary Loyalty is less effective than it once was, and that brands need to be more social and programs need to be more engaging – thus moving towards True and Cult Loyalty. This is a hard case to refute – brands cannot rely any longer on mercenary loyalty alone.

After the Dust Settled

So what conclusions can we draw from this debate? While Rubin made a salient point about points, it is also true that points remain an incredibly useful tool to direct and influence humans to behave in a specific way. In any human endeavor, including marketing programs, the brain needs some system to hook into and to commit to. Points are great for that — they give consumers a framework for understanding expectations, a game to master and to beat, and a means to track progress toward goals. Are points the only way to do this? No, certainly not. But, in the loyalty space at least, they are the most proven approach of this kind to drive behavior.

While a hand vote at the end of the debate gave a decisive win in favor of the pro-points argument, a savvy loyalty marketer would tell you that both points and experiences are essential in any loyalty program offering. Rick Ferguson, CEO of The Wise Marketer, summed up the debate saying: “(Harris) and Rubin agreed that essentially both sides were right. Points programs are still a valuable tool, but (the) argument that points alone are no longer sufficient to win true brand loyalty resonated with the audience.”